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Kathmandu Capital on Kaspi $KSPI LI

Thesis: Kaspi is a top investment in Kazakhstan, leveraging regulatory advantages and regional growth with strategic acquisitions

(Extract from their Q3 letter) https://t.co/7NSAXoib7M
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It took 438 days for the deal to be completed. https://t.co/LNjjKtpKE9
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⁠Stock Analysis Compilation
Stock Analysis Compilation #69 is in your inbox 🔥
(link in bio)

21 stock pitches from the best hedge funds & newsletters : $AVGO $CROX $ENPH $EVO $TUSK $MDB $ORLY $BTU $NYT $TMDX $UBER $VVV $YETI and many more https://t.co/KduzDyvsp9
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Palantir $PLTR stock: a bold prediction of how I think its stock chart will look like🔮

Details in comments https://t.co/wblJeJtfu0
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⁠App Economy Insights
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📧 198 articles.
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🤯 486,000+ followers & subs.

You didn’t want to miss these 10 articles. 👇
https://t.co/dXM6T9rrR3
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⁠Quiver Quantitative
Nancy Pelosi has lost $3.1M in the stock market today, per our estimates: https://t.co/wKSJ6m13fY
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⁠Dimitry Nakhla | Babylon Capital®
A quality valuation analysis on $MSCI 🧘🏽‍♂️

•NTM P/E Ratio: 36.97x
•10-Year Mean: 35.81x

•NTM FCF Yield: 2.97%
•10-Year Mean: 3.21%

As you can see, $MSCI appears to be trading near fair value

Going forward, investors can receive ~3% LESS in earnings per share & ~7% LESS in FCF per share 🧠***

Before we get into valuation, let’s take a look at why $MSCI is a quality business

BALANCE SHEET🆗
•Cash & Short-Term Inv: $497.07M
•Long-Term Debt: $4.48B

$MSCI has an ok balance sheet, a BBB- S&P Credit Rating, & 7.81x FFO Interest Coverate

RETURN ON CAPITAL✅
•2020: 28.6%
•2021: 26.5%
•2022: 33.0%
•2023: 35.2%
•LTM: 38.1%

RETURN ON EQUITY🆗
•2020: (231.5%)
•2021: (239.3%)
•2022: (148.6%)
•2023: (131.4%)
•LTM: (134.1%)

*Negative ROE due to heavy use of debt

$MSCI has strong return metrics, highlighting the financial efficiency of the business

REVENUES✅
•2013: $0.91B
•2023: $2.53B
•CAGR: 10.76%

FREE CASH FLOW✅
•2013: $0.28B
•2023: $1.21B
•CAGR: 15.76%

NORMALIZED EPS✅
•2013: $2.16
•2023: $13.52
•CAGR: 20.13%

SHARE BUYBACKS✅
•2013 Shares Outstanding: 121.07M
•LTM Shares Outstanding: 79.24

By reducing its shares outstanding 34.5%, $MSCI increased its EPS by 52.6% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 82.0%
•LTM Operating Margins: 53.6%
•LTM Net Income Margins: 43.1%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~3% LESS in EPS & ~7% LESS in FCF per share

Using Benjamin Graham’s 2G rule of thumb, $MSCI has to grow earnings at an 18.49% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be less than the (18.49%) required growth rate:

2025E: $17.07 (13.6% YoY) *FY Dec
2026E: $19.39 (13.4% YoY)
2027E $21.64 (12.0% YoY)

$MSCI has a great track record of meeting analyst estimates ~2 years out, but let’s assume $MSCI ends 2027 with $21.64 in EPS & see its CAGR potential assuming different multiples

36x P/E: $779.04💵 … ~9.7% CAGR

35x P/E: $757.40💵 … ~8.7% CAGR

34x P/E: $735.76💵 … ~7.7% CAGR

33x P/E: $714.12💵 … ~6.7% CAGR

As you can see, $MSCI appears to have double-digit return potential if we assume >36x earnings, a level near its 10-year average multiple of 35.81x

However, this assumption doesn’t leave us with any margin of safety despite $MSCI wide moat, exemplary capital allocation, & linearity in its EPS & FCF

Today at $606💵 $MSCI appears to be fully valued

$MSCI flash crash in April was one of the best times in the last 10 years to accumulate shares (as I suggested in an analysis I shared then)

I’ll be interested in accumulating $MSCI if it trades closer to $500💵 or at 30x NTM estimates (~18% below today’s price) where I can reasonably assume double-digit return potential while relying on a 30x multiple

#stocks #investing
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𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️: 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐍𝐎𝐓 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐀𝐝𝐯𝐢𝐜𝐞. 𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐚𝐯𝐞 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭.

𝐓𝐡𝐞 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐢𝐬 𝐢𝐧𝐭𝐞𝐧𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐬𝐡𝐨𝐮𝐥𝐝 𝐧𝐨𝐭 𝐛𝐞 𝐜𝐨𝐧𝐬𝐭𝐫𝐮𝐞𝐝 𝐚𝐬 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞 𝐭𝐨 𝐦𝐞𝐞𝐭 𝐭𝐡𝐞 𝐬𝐩𝐞𝐜𝐢𝐟𝐢𝐜 𝐧𝐞𝐞𝐝𝐬 𝐨𝐟 𝐚𝐧𝐲 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥 𝐨𝐫 𝐬𝐢𝐭𝐮𝐚𝐭𝐢𝐨𝐧. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐢𝐬 𝐧𝐨 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞 𝐨𝐟 𝐟𝐮𝐭𝐮𝐫𝐞 𝐫𝐞𝐬𝐮𝐥𝐭𝐬.

𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢�[...]